Yes, Diversify: Move Some of Those Eggs
The current state of the auto glass replacement and repair market is causing more shops to put some of their eggs in other baskets. For those who are not sure which baskets to choose, the Auto Glass Conference in Tucson offered a 7 a.m. seminar Friday morning with three speakers who explained what they had done to diversify at their companies.
Steve Mort, Don's Mobile Glass, Modesto, Calif., has taken the route of purchasing businesses in other areas and adding auto glass to them. One of those moves by the company, which was founded as a strictly auto glass operation, was the acquisition of Wardrobe and Bath Specialties, which makes shower doors for small shops that don't specialize in shower doors. This has now become 50 percent of the company's business, Mort reported. He added that the amount of capital required for fabrication is "enormous."
While the company has had success in adding residential operations to its AGRR acquisitions, he explained to the 30 or so attendees at the session that Don's acquired three auto glass operations in the Bay Area in 2005 and has had trouble adding flat glass operations to them. "It's hard to find technicians for that area," he stated.
Mort said that the company likes the residential replacement market. "It's
a wide market and we see growth there," he said.
He emphasized that the facility, a self-service car wash, should be clean because that's something consumers want and remember. He reported that survey cards have proven that customers come to the auto glass service because of the car wash, proving his point that branding is key.
Heinauer explained that the points that have to be taken under consideration before starting up a car wash are the amount of space available (there has to be enough room for traffic of both businesses), zoning issues, competition (you have to be a destination location), street traffic flow (so that it's easy for drivers to pull into the car wash) and week-end traffic (bad weather on a Saturday can undermine the whole week).
Heinauer estimated that the initial investment for starting a car wash is $1 million. He also pointed out that you have to depend on the car wash distributor for help in getting started and for ongoing help. For companies interested in adding a car wash, he suggested attending a trade show in this market to become familiar with the companies serving it.
The South Carolina businessman, who has a half dozen locations, said he was also thinking of starting a coffee shop, a la Starbucks, to drive traffic to the AGRR business and the brand which is looking to protect.
The third speaker, Jerry Wright, AAA Glass & Mirror Co., Fort Worth, Tex., advised attendees to know their own abilities and not to over-promise and under-perform. "The best customer to have is one you already have because they trust you and like you," he stated.
He suggested the companies diversify into residential glazing with insulating glass window replacement. "The average home has 14 to 48 opportunities, and they already know you from the auto glass work," he said. He added that to help get into this area most manufacturers have adequate training available.
"Open your eyes to the natural income streams," he urged. "You
want people to remember you when they have glass needs."
The final event on the day's educational program was a review of the Auto Glass Replacement Safety Standard (AGRSS) with Cindy Ketcherside, AGRSS chairperson, Carl Tompkins, Sika Corp., and Bob Beranek, Automotive Glass Consultants.
No reproduction, in print, electronic or any form without the expressed written permission of
Key Communications Inc. 540-720-5584.